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Author Topic: Paxful scamming with fake fees  (Read 189 times)
Kify
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May 27, 2018, 01:39:23 AM
 #1

Okay, so basically I have been a Paxful user for around a month now, I've bought more than 1k $ in BTC there and the only negative thing about it is the withdrawal fee and how they are tricking customers into paying it.
When you want to withdraw your BTC and go to the withdrawal box, they ask you for the amount of BTC to withdraw and your password, when you click on next they will notify you that there will be a 0.0008 BTC miner fee.
Thats an ABSURD amount, that's $7 to just withdraw your money!

I know that miner fee's are mandatory and not controlled by Paxful, and that miners fee's were REALLY high a couple of months ago and the 0.0008 BTC fee would be OK a couple of months ago, however the fee's are not that high anymore.
Infact, regular fee's are only $0.07 at the moment, so why is Paxful charging $7?

OK, they want to get your BTC confirmed as fast as possible. Not a problem. but why 100x the current normal tarrif?
Here comes the part where my blood really starts to boil:
THE FEE'S YOU PAY GO TO PAXFUL, NOT MINERS!
Yes, that's right. The absurd $7 fee's you pay for every withdrawal goes to Paxful. They send their withdrawals with fee's of $0.9...
Here's my withdrawal:
https://blockchain.info/en/tx/924d701875ea98dc7782a8a7a7ce6ae70e1e74790b07206a60d318f05ec79d0c
This transaction has 23 outputs, so 22 people have withdrawn their BTC at the same time as me.
23 people paid $7 as withdrawal fee's: 7 x 23 = $161 that they have taken from 23 people as 'miners fee', but if you look at the details of the transaction you can see they only paid $0.86 for miners fee! 0.86/23 should be not even 4 cents per person!

It would be completely fine if they stated that the fee's would go to Paxful, however they lied about it in their FAQ page and even in a popup message when you are going to withdraw!

As you can see here:
https://paxful.com/support/post/what-about-sending-out-bitcoins-from-my-wallet-and-the-bitcoin-network-miner-fees-who-pays-and-when/
(^They even say the fee's don't go to Paxful! The douchebags!)
https://paxful.com/support/post/miners-fee/
In case they remove it:
https://gyazo.com/9d822d17bbf0b0761fe68bffaac1c4a5
https://gyazo.com/173cc870ed669f537fb5d6285ed7e4b6

The withdrawal I made got sent within 5 minutes, so lets say that 20 people withdraw every 5 minutes, thats 240 people an hour and 5760 people a day.
5760 x $7 = $40320
40k!!!!! Even if thats a rough estimate, it's safe to say that they SCAM more than $10k a day

Is Paxful even a registered company? Isn't this illegal? I demand a refund for all withdrawal fee's!
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May 27, 2018, 02:10:16 AM
 #2

This is not illegal. There are costs associated with processing withdrawals beyond the transaction fees paid to the miners.

It looks like they might have some kind of arrangement with BitGo, that might be inflating their costs (and if history is any guide, likely putting their money at risk).

It would probably be best if they changed the way they describe the fee being charged to make it be more in line with reality.

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June 11, 2018, 11:47:28 PM
 #3

Yep. I stupidly just made an account, needing BTC quick and figured it be about the same as going to the ATM....

They are charging me $3.5 to withdraw when the average miner's fee now is $0.17. Total scam. Never again. Waste of $3.
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June 14, 2018, 08:01:14 PM
 #4

There's a lot of services that are still charging outdated fees, and not just Paxful.

It's definitely a thing that you have to consider when you are opening an account, especially trading with smaller amounts which their transaction fees can take up a great percentage of. However, I don't think that you can say they are scamming.

During the peak of the fees, 0.0008 BTC was actually a pretty cheap fee to pay. Perhaps now they're just sticking with that to recoup some losses. Not to mention that receiving small inputs can add up as fees when you try to send them as well, but there is no deposit fee on paxful (as opposed to LBC).

I think that it's a negative for using their service, since LBC only charges 5k satoshis to withdraw. And I would definitely take it into account if I'm trying to trade. But it's not really anything of a scam.

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June 21, 2018, 05:49:48 PM
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There's a lot of services that are still charging outdated fees, and not just Paxful.

It's definitely a thing that you have to consider when you are opening an account, especially trading with smaller amounts which their transaction fees can take up a great percentage of. However, I don't think that you can say they are scamming.

During the peak of the fees, 0.0008 BTC was actually a pretty cheap fee to pay. Perhaps now they're just sticking with that to recoup some losses. Not to mention that receiving small inputs can add up as fees when you try to send them as well, but there is no deposit fee on paxful (as opposed to LBC).

I think that it's a negative for using their service, since LBC only charges 5k satoshis to withdraw. And I would definitely take it into account if I'm trying to trade. But it's not really anything of a scam.

That's not the problem lol, the problem is that they're not using it for miners fee's like they are saying... if you withdraw and look at the transaction there are 5-15 withdrawals in it and the total fee's paid for the entire transaction is not even a dollar, 15 withdrawals x $3.5 (changed their fee from $7 to $3.5, you're saying they're outdated but why didn't they change it to a buck or something? $3.5 is still alot) = $52.5
$52.5 paid for the entire transaction, yet the transaction still shows that only a buck has been paid as fee's. Where did the 50 bucks go? I'm damn sure BitGo doesn't charge that much, like the first reply to this thread suggested.
Please don't reply with things like "there are other costs" or something, they CLEARLY state the fee's are for mining fee's, yet they only pay a buck per ~15 withdrawals...
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June 24, 2018, 06:32:50 AM
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 #6

There is a very simple solution to your problem... Don't use Paxful. Roll Eyes

If you don't like the way they do business, or the fees that they charge... don't use them. They are upfront about how much they're charging:
The current miner’s fee is 0.0008 bitcoin.

The fact that they then collate all the withdrawal requests into a single transaction using a ridiculously low fee and then pocket the difference is shitty, but isn't a scam. Nor is the fact that these days, blocks are empty and the "average" fee rate is like 1 sat/byte and working out to a per transaction total of like 0.00000800 BTC. They said they would charge 0.0008 BTC... and they charged 0.0008 BTC. *shrug*

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June 25, 2018, 09:41:01 PM
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Perhaps they should update their fees and/or their FAQ, but apart from that I don't see an issue.

The high fees were because of the period of time when 0.0008 BTC was actually considered to be quite favourable fees, and they were actually taking a loss at the time by processing withdrawals for only 0.0008 BTC (fees actually got up to 0.002 btc on average at least for my transactions), not to mention the fact that they probably have a lot more dust inputs.

I don't see any problem with them charging 0.0008 BTC. In fact most exchanges still charge 0.0005 BTC+ for BTC withdrawals. Can they do a better job of updating the FAQ? Perhaps. But they're just recouping their losses from when fees were way higher, imo. It certainly doesn't make them a scam imo.

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June 29, 2018, 10:26:26 PM
 #8

I don't even understand what part of it is even questionable?

That's their fee, its all transparent, if you want to use their service you pay that and they provide you the service....


I think walgreens milk is overpriced, because they get it for MUCH cheaper than they are selling it to me.....

Does the OP understand what is meant by a scam....?



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July 21, 2018, 04:09:58 PM
 #9

the annoying thing with most members in this forum is that they support scams.
why the fuck will a service be charging 0.0005-0.0006 btc per transaction and you all are supporting it. this is clear scam

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July 22, 2018, 01:52:21 AM
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this is clear scam
No, it isn't a scam. Roll Eyes

A scam would be saying: "we only charge 0.00001 BTC per transaction"... and then charging the user 0.0005 BTC. Suppose you have 7-11 charging $1 for a coffee... and Starbucks charging $5 for a coffee... is Starbucks a scam? No, it's just over-priced! Roll Eyes

Paxful are free to charge whatever they like, users are free to go and use any service they like.


Quote
the annoying thing with most members in this forum is that they support scams.
why the fuck will a service be charging 0.0005-0.0006 btc per transaction and you all are supporting it.
Who says I'm "supporting" it? I'm saying, if you don't want to pay 0.0005-0.0006 BTC per transaction, then go and use another service.

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July 22, 2018, 02:08:57 AM
 #11

this is clear scam
No, it isn't a scam. Roll Eyes

A scam would be saying: "we only charge 0.00001 BTC per transaction"... and then charging the user 0.0005 BTC. Suppose you have 7-11 charging $1 for a coffee... and Starbucks charging $5 for a coffee... is Starbucks a scam? No, it's just over-priced! Roll Eyes

Paxful are free to charge whatever they like, users are free to go and use any service they like.


Quote
the annoying thing with most members in this forum is that they support scams.
why the fuck will a service be charging 0.0005-0.0006 btc per transaction and you all are supporting it.
Who says I'm "supporting" it? I'm saying, if you don't want to pay 0.0005-0.0006 BTC per transaction, then go and use another service.


I think the issue is here is that paxful clearly says they charge .0005 for withdrawals to pay miners fees yet they batch transactions and only usually pay 2-10 sat/b so they take .0005 from 25+ users claiming it is used for miners fees yet they don't even use .0005 on fees.

Heres a paxful withdrawl.

they paid 0.00007889 BTC in fees while taking.0005 btc from 23 users and explicitly stating the .0005 was to pay miners fees
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July 24, 2018, 06:56:56 AM
 #12

To put things into perspective, Paxful (and any other company that holds bitcoin on behalf of their customers) must invest in security systems/procedures to keep their customer's money safe, and customer money is most vulnerable when being withdrawn. Further, Paxful likely needs to periodically withdraw from cold storage, which they must pay one or more employees to do manually.  

As mentioned previously, Paxful should do a better job in describing the fee charged.

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Pmlimits666
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July 24, 2018, 12:05:38 PM
 #13

To put things into perspective, Paxful (and any other company that holds bitcoin on behalf of their customers) must invest in security systems/procedures to keep their customer's money safe, and customer money is most vulnerable when being withdrawn. Further, Paxful likely needs to periodically withdraw from cold storage, which they must pay one or more employees to do manually.  

As mentioned previously, Paxful should do a better job in describing the fee charged.

Nothing you say changed the fact that they explicitly say the fees are for miners fees yet they batch transactions and pay less to the miners that they take from 1 user.
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July 24, 2018, 01:22:35 PM
 #14

To put things into perspective, Paxful (and any other company that holds bitcoin on behalf of their customers) must invest in security systems/procedures to keep their customer's money safe, and customer money is most vulnerable when being withdrawn. Further, Paxful likely needs to periodically withdraw from cold storage, which they must pay one or more employees to do manually. 

As mentioned previously, Paxful should do a better job in describing the fee charged.

Nothing you say changed the fact that they explicitly say the fees are for miners fees yet they batch transactions and pay less to the miners that they take from 1 user.
You’re right, they should be more transparent and call it a withdrawal fee and not a miner fee. They can explain that they must pay miner fees to process a withdrawal.

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Pmlimits666
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July 24, 2018, 11:34:59 PM
 #15

i question paxful support today about this and they said
 " We understand your concern, the fee you are seeing is the miners fee - this is a send out fee and it goes to the bitcoin miners to confirm the transactions. Our fee is currently 0.0005 BTC at today's rate."

Here is a paxful withdrawl https://www.blockchain.com/en/btc/tx/
they batch txs so they sent out more than 30 withdrawls and collected more than .015 in fees that they explicitly say goes to miners yet after collecting those 30+ .0005 they paid miner fee of .00023166 ...less than half of 1 of those 30 fees they collect. I think this does fall under scam category as they are clearly stating the funds are going somewhere that they arent.

edit: after telling them exactly what i said here, i was informed they are looking in to these fees now which i guess is a good start at least. in the past when ive pointed it out to them they just end it with " well you agreed to the t.o.s" so at least maybe some progress.
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July 25, 2018, 07:56:10 AM
 #16

See. Sometimes, it's better to actually talk to people instead of shouting scam.
I know the likelihood of encountering a scam here is way higher than elsewhere, but I still think ppl should be given the benefit of doubt until proven wrong.

Can't really blame people for expecting to get scammed left and right, sadly, but still, it's somewhat annoying and a sign that some things went completely wrong in Cryptoland.

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